Question

Why might a town decide to issue bonds??

Answer 1

The correct option is (C). Both A and B.

To help save money for residents and to build new roads or bridges.  

Further Explanation:

Bond:  

Bond is a long-term debt which is issued by the company and the company promises to pay with interest to their bondholders.

• Investing in bonds will make the residents of the town, save money.  

• Investing in bonds will help in building new roads or bridges. Bonds will help the town to invest in building and it will develop the town.

• The bonds will make the town residents to earn interest by issuing the bonds and help them to save money for them, and also help to build new roads or bridges. Therefore, this option is correct.

• The bonds will make the town to earn interest by issuing the bonds and help them to save money for them, and also help to build new roads or bridges. Therefore, the option (C) is correct.

Thus, the bonds will give a regular interest annually to the residents of the town and by this, they can save their money and invest in for the development of their town like, invest in their money to build the new roads and bridges.  

Learn More:

1. Stock and bonds  

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2. Stock price  

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3. Stock portfolio  

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Answer Details:

Grade: High school

Chapter: Stocks and bonds

Subject: Business studies

Keywords: Why might a town decide to issue bonds.

Answer 2

I hope this answers your question. The bond that a town might issue is called a municipal bond. Municipal bonds are issued to finance a local government’s public projects like road repairs, school building, airports, seaports or any other infrastructure-related repairs.